Unemployment: Following the financial crisis and mining boom hype, Australia has had very little jobs growth for two years. Photo: Fairfax Graphics

During the 2013 election campaign, Treasurer Joe Hockey told Fairfax Media his political hero was former Republican president Teddy Roosevelt - the man who led the charge of the Rough Riders up San Juan Hill during the Spanish-American War for Cuba in 1898.

Such a feat is unlikely to ever be required of Hockey, or any other member of the cabinet. But there is something of the crazy-brave in the hard line on industry assistance the Abbott government is taking.

Hockey set markets racing on Thursday when he said the government was leaning towards guaranteeing Qantas' new debt. The news sent shares up 8 per cent in the biggest day of trading this year. It was a signal that the government was prepared to do for Qantas what it wasn't for Toyota, Holden or SPC. In the case of the Victorian fruit-canning firm, it was left to the Victorian Coalition government to bail it out.

Hockey delivered the political shot in the arm to the airline's share price on the same day that unemployment rose to 6 per cent for the first time in a decade, for the first time since Tony Abbott was the employment minister in the Howard government and Hockey the minister for small business.

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Dramatic and expensive manoeuvres by the Rudd government ensured that even at the peak of the global financial crisis, when other nations went into recession, Australia's unemployment rate crept no higher than 5.9 per cent and later slid to 4.9 per cent.

With the GFC spending finished and the mining boom off the boil, Australia has had little jobs growth for two years. In the past year it has had next to none. While Australia's population climbed the usual 400,000, the number of Australians in work climbed just 1410.

When rounded to one decimal place, the Australian Bureau of Statistics says the growth rate was zero.

Despite the political sensitivity around job losses - and Labor trying to establish a damaging political narrative in Parliament - Hockey said the government was being dragged kicking and screaming towards a decision to help Qantas and that a final decision would take into consideration four special factors.

The first was that the airline had a ''ball and chain'' around its leg in the form of the Qantas Sale Act, which limits foreign ownership, and thus its capacity to raise capital. Second, that it provided an essential national service. Third, it was at a competitive disadvantage with Virgin because that airline enjoys foreign backing. And fourth, that Qantas would have to do its own ''heavy lifting'' and reform the business.

''How they do it is up to them, but they have to show they are doing the hard yards, and it has to be in partnership with the unions,'' he said. ''The unions have to understand that this is a challenge. Qantas workers are up for it. Every time I get on one of their planes, they say we understand it's a challenging time.''

Late on Thursday night there were already suggestions, driven by the Transport Workers Union, that Hockey and Qantas may have agreed the airline would become more vocal about industrial relations reform in Australia in exchange for the debt guarantee. Qantas chief Alan Joyce certainly has form in taking on transport unions, with his decision to ground the airline in 2011 lingering in Coalition minds.

Before the election, the government put the onus on business to make the case for workplace reform. Now in government, the Coalition is still looking for political cover from business as it launches a royal commission into union corruption, tries to re-establish the Building and Construction Commission and launches a Productivity Commission inquiry into the Fair Work laws.

But a Qantas insider rubbished suggestions the airline will be used as the ''poster boy'' for the government's industrial relations agenda. ''That's not our goal. We are not going to play that game. This is about what is best for the company.''

Hockey has a fondness for climbing mountains - and the metaphors they throw up. The Treasurer climbed Mount Kilimanjaro a few years ago and remembers it as ''the best thing I ever did … well, maybe not the best thing, but it was up there''. He sees parallels in the task that confronts the Abbott government.

''It was gruelling for six or seven days but we got there … you have all sorts of problems and challenges on the way but you get there. And that's what we are doing. We are working as a team, the Prime Minister, myself, the whole cabinet - we are up for it. It's going to be hard, but we have to get there, we owe it to the country,'' Hockey said in an hour-long interview in his Parliament House office on Thursday.

''We have to make the decisions that are right for the destiny of the nation, that's what people expect from the government. But we can't climb the mountain in a day. We are not going to be the Howard-Costello government or the Hawke-Keating government in 12 months. We can't have a reform program that is immediate, and we should not be judged by the last year or the legacy of other governments.''

The demise of Holden and Toyota was not of the government's making, he said, brushing aside suggestions that as Treasurer he has overseen a national catastrophe. ''You just have to deal with what's handed to you. The car industry oversaw the demise of themselves. They produced motor vehicles that Australians weren't buying.

''As I said in the party room, the sky is always darkest before the dawn. We know what we inherited. Now, we know what we have to do. It's an exciting challenge for our nation, but I think people are up for it, as long as there are no left-field shocks out of government, through punitive regulation or punitive tax.''

Infrastructure investment will be a key plank of the government's move to stimulate growth as the mining boom slows.

In its most recent budget update, the Treasury said unemployment would stop climbing at 6.25 per cent, but the forecast is out of date. It was based on another forecast that said employment would grow 1 per cent throughout 2012-14. So far, in the first seven months of the year it has grown not at all.

Abbott's election promise of 1 million new jobs in five years is one he will never keep, just as Julia Gillard never kept her 2011 promise to create half a million jobs in two years. Both promises were made by assuming that what had happened when the boom was at its peak would continue when it had passed.

If the overall employment market is bleak, the market for what were once thought of as real jobs is appalling. In the past year, 91,700 full-time jobs have vanished. They have been replaced by 93,100 part-time jobs. Yet the average number of hours worked per employee is climbing. ''We are working more intensely,'' says Bill Mitchell of the Centre of Full Employment and Equity at the University of Newcastle. ''Firms are probably reluctant to take on new workers, given the uncertainty.''

Manufacturing has lost almost 30,000 jobs. Hammered by the high dollar, until recently the mining industry was one of its few salvations. But now mining itself is cutting back, and the dollar is (so far) staying historically high.

While campaigning for election in August, Abbott said he was proud that for generations Australia had been ''a country that makes things''. But each generation does it less. In the 1950s, as many as one in four Australian workers was employed in manufacturing. By the 1980s, it was one in six. Today, it is one in 12, and shrinking. By the time Ford, Holden and Toyota shut up shop in 2017, Australia will most likely employ more people in tourism than in manufacturing. Manufacturing once employed four times as many.

It is a shift that unsettles us in ways we can't easily explain. Like Abbott and Kevin Rudd before him, we say we want to be part of a country that makes things. In December, six in every 10 Australians polled by Essential Media said it was important Australia continued to make cars, even if it cost hundreds of millions in government support. But fewer than one in every 10 of the new cars Australians buy are made here.

''Children and grandchildren'' crop up repeatedly in the hundreds of handwritten letters to the Productivity Commission, painstakingly retyped and placed on its automotive assistance website. ''National pride'', ''self-esteem'' and ''the Australian psyche'' are others. It is as if they are writing about a national airline. But they seem to be writing about something even more important. The making of cars seems to say something about who they are.

Most of those writing do not work in the auto industry. They say they are teachers, nurses and public servants, worried that all that will be left in Australia after the car makers leave is ''real estate speculation and the banking sector - a terrible outcome for our children''.

The disconnect between what Australians do these days and what we would like to believe we do says much about our keenness to hang on to our past and perhaps more about a nagging feeling that the jobs many of us have are not ''real'' - another word that crops up.

The special place of cars might be because each of the factories is big. The city of Elizabeth, north of Adelaide, was built in order to provide a home for Holden. Ford is similarly central to Geelong, just as ''the cannery'' run by SPC Ardmona is central to Shepparton. And just as ''the steelworks'' were central to Newcastle.

Abbott touched a nerve on Tuesday when he compared the end of the car industry to BHP's exit from Newcastle. ''The transition is not always easy,'' he said. ''But if you look at places that have had significant change, like Newcastle, which lost its steelworks back in the 1990s but is a different and, many would say, somewhat better city today, these things can be done.''

On Thursday, 43 per cent of people who answered a Newcastle Herald poll disagreed with Abbott that their town was a better place following BHP's departure. After the closure of the steelworks, and the loss of 2242 jobs, the younger workers retrained or got jobs in BHP spinoff OneSteel, which still makes products in Newcastle. Many of the older ones never worked again, with most passing their early retirements fishing or drinking. House prices plummeted as many moved out and the market remains sluggish. The city's central business district is a wasteland of empty shops.

The blue-collar jobs were replaced by promises the city would become a centre of excellence for education and health. But it hasn't happened. Newcastle's intended Silicon Valley, the Honeysuckle urban-renewal project, remains unfinished after more than a decade.

And then there is Abbott's decision to hand $16 million to Cadbury. After a morning following Freddo Frogs around the factory conveyor belt during the election campaign, he said the grant would restart a ''unique visitor tour'' that had stopped in 2008. For all of Abbott's protestations, the decision to reject SPC's request for assistance does not sit well with the Cadbury grant - a fact few in the Liberal Party acknowledge publicly, but concede privately.

Hockey says he is in lockstep with Abbott. But his broader allegiances are changing. While Roosevelt might be his political hero, Hockey said he is reading Not for Turning, a biography of former British prime minister Margaret Thatcher. He is halfway through the story of the Iron Lady, which, he said, is interesting because ''what she was dealing with as a human being was not dissimilar to what others deal with''.

For Australians looking for a read on the direction of the Abbott-Hockey government, Hockey's bedtime reading is instructive.